Analyst Downgrades: ARM, Juniper, Chesapeake Energy

Analysts downwardly revised their ratings on ARM Holdings plc (ADR) (ARMH), Juniper Networks, Inc. (JNPR), and Chesapeake Energy Corporation (CHK)

Jul 13, 2015 at 10:01 AM
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Analysts are weighing in today on tech titans ARM Holdings plc (ADR) (NASDAQ:ARMH) and Juniper Networks, Inc. (NYSE:JNPR), as well as oil-and-gas issue Chesapeake Energy Corporation (NYSE:CHK). Here's a quick roundup of today's bearish brokerage notes on ARMH, JNPR, and CHK.

  • ARMH saw its rating reduced to "underweight" from "neutral" at J.P. Morgan Securities, which also lowered its price target to $41.50 from $42.75 -- following the lead of Canaccord Genuity. Technically speaking, the stock has had a ho-hum 2015, up just 1.3% to trade at $46.90, after recently breaking lower from the $52-to-$54 range. Traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been buying to open puts over calls at a rapid-fire rate amid this downtrend. Specifically, during the last two weeks, ARM Holdings plc has racked up a put/call volume ratio of 17.36 -- higher than any other comparable reading from the past year.

  • Nomura cut its price target on JNPR to $26 and reiterated its "neutral" opinion, which is business as usual among analysts. However, this is somewhat surprising, given the stock's 17% year-to-date lead at $26.12. In fact, Juniper Networks, Inc. recently took a bounce off its ascending 100-day moving average, which also supported the shares in March. While Nomura is skeptical, traders at the ISE, CBOE, and PHLX are decidedly bullish. JNPR's 50-day call/put volume ratio of 2.77 outranks 95% of comparable readings from the last 12 months. In other words, speculators have bought to open calls over puts at a faster rate just 5% of the time in the previous year.

  • CHK has had a brutal year, plummeting almost 44% to trade at $10.98 -- including 3.5% this morning -- and touching a six-year low of $9.94 last week. Barclays, which is weighing in on a number of energy stocks today, cut its price target on Chesapeake Energy Corporation to $7 from $10, reflecting the equity's bearish technical trajectory -- and projecting a move to levels not seen since May 2003. There's plenty more negativity among analysts, too. In fact, 80% of brokerages consider the shares a "hold" or worse. However, additional price-target cuts may be in the cards, considering CHK's consensus 12-month price target of $14.50 stands at a significant premium to current trading levels.

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